Shimao, Kaisa, Fantasia report deeper losses in sign market recovery is still months away

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Shanghai-based Shimao posted a loss of 22.7 billion yuan (US$3.2 billion) for the six months to June, compared with 12 billion yuan a year earlier

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Liquidation hearing against Shimao has been adjourned until December 16 as the troubled developer tries to gain creditors’ support for its restructuring proposal. Photo: Bloomberg

Salina LiandYulu Ao

Published: 9:00pm, 29 Aug 2024Updated: 11:25am, 30 Aug 2024

China’s multi-year housing market slump has continued to hurt the nation’s big developers, widening losses at Shimao Group, Kaisa Group and Fantasia Holdings while delaying their efforts to overcome a debilitating debt crisis. Sunac, which reorganised its debt recently, is facing a similar predicament.

Losses at Shimao widened to 22.7 billion yuan (US$3.2 billion) in the six months to June 30 from 12 billion yuan a year earlier, the firm said in a stock exchange filing on Thursday. Kaisa’s net loss deepened 36 per cent to 9 billion yuan, while Fantasia recorded a 3.2 billion yuan loss versus 2.7 billion yuan a year ago.

Revenue at all the four private developers shrank from a year earlier as buyers held back purchases amid lingering concerns about home deliveries. The developers will not pay interim dividends given the poor report cards.

“In the first half of 2024, the property market in China continued to undergo adjustments, and there was no sign of rebound from weak sales in commercial properties,” Shimao said in its filing.

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Boom, bust and borrow: Has China’s housing market tanked?

China’s property market, once a major pillar of the economy, has been in the doldrums since the government introduced the “three red lines” policy in August 2020 to restrict developers’ borrowing binge. The measures denied cash-starved developers of liquidity support, triggering a record amount of bond defaults.